Consequences of failing to consider halacha when planning an estate

What are the halachic results of neglecting to plan an estate according to halacha?

Teshurat Shai (R. Solomon Leib Tabak, Hungary, 1832-1908), chapter 159 (cited by Pitchei Choshen, Hilchot Yerushah, Chapter 1, fn 4), addressed the following situation.  A man died survived by a son and four daughters.  Pursuant to local law, the decedent’s estate was divided equally among his five children.  Some time later, one of the daughters and her husband learned that the decedent’s son was the sole halachic heir, as the decedent apparently made no halachically valid provisions to ensure that his daughters received portions of the estate.

Since the decedent’s death, however, the the value of the real estate that the daughter and her husband believed was their inheritance had appreciated.  Some of the property had been sold.  The daughter and her husband had collected income and paid all expenses associated with the property.

R. Tabak rejected the daughter’s argument that her brother had in effect gifted property to his sisters when he consented to the division of the estate between himself, a yoresh, and his four sisters, who were not yorshim.  R. Tabak wrote that the brother may have consented because he believed that local law controlled (which would be an erroneous application of dina demalchuta dina, as discussed in an earlier post).  Citing Maharik and Rashdam, R. Tabak wrote that in circumstances where the controlling halachot are commonly misunderstood, transfers are presumed to be prompted by a misunderstanding rather than by an intent to give a gift.  This principle applies even if the transferor did not affirmatively claim he never intended the transfer to be a gift.

R. Tabak therefore ruled that the original distribution of the estate was invalid, and that the property held by the sister had to be returned to her brother.  Furthermore, wrote R. Tabak, she had to pay her brother all of the income produced by the property since the distribution.  Even the income produced by the property after she had sold it had to be returned, since the sale of any real estate was invalid.  Property that had been sold and couldn’t be recovered had to paid for at its current appreciated value, not its value at the time of the decedent’s death.

R. Tabak wrote that the sister was entitled to reimbursement for expenses associated with the property, as well as for any of the decedent’s debts she had paid.

While this ruling may appear to be harsh, it is logical and not necessarily surprising.  Since according to halacha it is impossible to illegally convert real estate to one’s own possession, the brother remained the owner following the decedent’s death and was entitled to all of the income as well as the appreciation of the real estate.  His sister’s illegal or mistaken management of the property essentially created something similar to a constructive trust, where she held the property for her brother’s benefit, and was simply entitled to reasonable reimbursements for debts and expenses paid on her brother’s behalf.

It is also clear that another solution was possible.  If (and this is sometimes a big if) at the later date the yoresh is willing and capable, he can consent to an equal distribution upon his understanding that he is entitled to the entire estate.

This fact pattern has no doubt repeated itself many times over, even among people who strictly follow halacha in the course of their daily lives.  The failure to properly plan an estate according to halacha can lead to the realization many years or even decades after a legal distribution that the estate’s beneficiaries have been withholding property from the yoresh without adequate consent.  According to the Teshurat Shai’s teshuvah, not only must the property be returned, but all income and appreciation associated with real estate — even if sold — must be disgorged.

While this post is not intended to be halachic advice, one who was a beneficiary of an estate in similar circumstances should consult with a competent posek or dayan as to any outstanding obligations to the yorshim and, if necessary, for advice on obtaining proper halachic consents.

Needless to say, proper planning could avoid repeating the problem for the next generation.

What is the Torah’s Economy? (Election Day Post)

Today’s election is widely seen as a referendum on the Democrat controlled Congress and first two years of Obama’s presidency, and specifically, the Democrats’ handling of the economy and the legislative agenda they pursued.

The theoretical question for this blog today, and a theme I hope to return to in the future:  What is the Torah’s ideal economy?  What kind of taxation is fair from the Torah’s perspective and what is objectionable?  While we’re not about to give our support to anyone campaigning on a Torah Economy platform, since there is a whole lot of modern complexity to deal with first, these issues are relevant to how we think about various political causes and legislative agendas.

I touched on the question of the Torah Economy several weeks ago.  Regular reader and frequent commentator, Yair Elnadav, initially commented on the post, but agreed to develop these themes into a guest post.

Capitalism and property ownership are protected by Jewish law.  In fact, a large part of Talmud deals with business law. The Mishna in Avot (5:10) states that one who says “what is mine is yours and what is yours is mine is an am ha’aretz, an ignorant person.”  R Ovadia of Bartenura (B Italy, D circa 1500 Jerusalem) explains that this refers to people who believe that private property should be used to benefit all members of society equally.  They do not know that “one who hates presents shall live” (Mishlei 15), and that independence is a virtue.  They are called “ignorant” because they do not have the intelligence to differentiate between proper and improper policies.

Rabbi Samson Raphael Hirsch further explains that the Mishna is telling us that Socialism is foolish. He explains that one is not free if he cannot own property. And someone can only give if he owns something. If the law requires everything to be shared, then the recipient is taking what is by right his.  Without private property, there is no giving or receiving.

Nevertheless, the Torah clearly regulates the economy to benefit society.   For example, the laws of ona’ah prohibit excessive and exorbitant pricing (Bava Metzia 49b).  The rabbis of the Talmud made many edicts to protect the market, such as banning cartels and monopolies (Bava Batra 90b) as well as other practices to further protect consumers (see Succah 34a).

The mitzvah of Yovel goes even further to create a social safety net.  The Torah states that every fiftieth year, Yovel (Jubilee), all land that had been sold since the previous Yovel reverts to its original owner (Vayikra 25:23 – 24).  Rambam in Moreh Nevuchim  (section 3 ch 39) explains that the purpose of this law is to protect the poor and insure that they will always have livelihoods.  By prohibiting the permanent alienation of land, the Torah protects debtors who are forced to sell.  At the same time, the Torah makes it impossible for families to accumulate and retain wealth by buying and passing on real estate to their descendents into perpetuity  These laws are particularly striking when we realize that the original Jewish society in Eretz Yisrael was overwhelmingly agricultural.  Livelihood, wealth and permanence depended on land ownership.  The Torah itself explains the reason for the law as “for the land is Mine [God’s].”

It seems that the underlying philosophy of the Torah Economy favors  capitalism limited by significant protections for the  poor.

This leads us into the Torah’s view of caring for the community’s needy.

The Torah describes the eglah arruffah ceremony performed over a person found dead outside of the city limits. The elders of the city recite a vidduy, confession, “And they shall answer and say ‘our hands didn’t spill this blood and our eyes did not see” (Devarim 21:7). Rashi, citing the Talmud (Sotah 45b) explains the city leaders are saying that they did not indirectly cause his death by noticing him within their city but allowing him to leave without food or accompaniment. It is obvious from the Talmud that it is incumbent on leaders of cities to make sure that the poor do not go hungry.

R. Yona of Girona (D 1263 Spain) states that although the people of Sodom committed many sins, such as theft, corruption and promiscuity, the verse only mentions one sin (Yehezkael 16:49) — “the hand of the poor and destitute – they did not strengthen.” (Sha’arei Teshuva 3:15)

The following few halachot relating to charity clarify the Torah’s view on public role in providing for the poor.

Rambam states the amount of charity one must give is as follows: If he can afford to support all the poor, he must do so.  If he cannot, he must give up to 1/5 of his property to fulfill the mitzvah of charity. The average person gives 1/10 of his property. If a person gives less than that, he has an evil eye (i.e., he is miserly). (Mishne Torah Mattanot Aniyyim 7:5).

Charity money is used to provide not only food, but also any living essentials the poor may lack, such as clothing, household utensils etc. (Rambam ibid 7:10)

The greatest form of charity is assisting the poor to become self sufficient by giving them jobs or loans, etc (Rambam ibid 10:7).

Although charity is a personal requirement, in the ideal halachic society it is the community, not the individual, that controls the distribution of charity money.  Rambam (ibid 9:1) tasks the city with making sure that the poor are provided for.  If an individual does not contribute to the city’s charity fund, or gives less than he should, the courts can force him to give more, and can confiscate property in order to provide for the poor.  Rambam (ibid 7:10).

Ultimately, ma’aser kesafim (tithing) is not private philanthropy, but a rather the mandatory fulfillment of a community obligation.

It seems to me that the Torah philosophy supports a strong welfare system. Poor are to be supported by the community, rather than allowing them to either remain destitute or find their own way out of poverty. Government is empowered to collect, enforce, and distribute to the needy.  Since the greatest form of charity is assisting the poor to be self sufficient, a priority should be given to helping people get skills, jobs, business loans etc, to help the poor become independent.

In conclusion, while the Torah supports welfare, it is by no means “Socialist” or “Communist”.  Rav Hirsch, mentioned above, says that there can only be welfare when there is Capitalism, since we can only choose to provide welfare if we are in a capitalist economy. This contradicts many political commentators that equate welfare with Socialism.

This essay is not meant to be taken lema’aseh, but rather to explore the issues of what a Torah Economy would look like, using Jewish sources. Hence the sourcing is not complete and is not used in a methodological way to determine halacha lema’aseh, actual law.  For additional reading, see Facing Current Challenges, Rabbi Dr Yehuda Levi, chapters 6 and 7.

Agreements To Arbitrate In Bais Din: Get It In Writing!

A recent decision from a New York State Supreme Court illustrates the importance of following proper procedure when arbitrating in Bais Din. In that case, a homeowner’s insurance company sued a Bais Yaakov school, alleging that work done to expand the school building had damaged their insured’s property, requiring the insurance company to pay substantial claims to its insured.

According to the facts in the decision:

Beth Jacob began construction to expand its building at 98-100 Lawrence Street, Brooklyn, New York, in late March or early April 2006. In mid-October 2006 Rabbi Michael Levi (Levi) was served with a summons to appear on behalf of Beth Jacob at the Beis Din Zedek Rabbinical Court of the Central Rabbinical Congress of the United States and Canada (Beis Din). The proceeding was initiated by Rabbi Aharon Zaberman and Eli Baumwolspiner. According to Beth Jacob, the parties appeared before the Beis Din on October 22, 2006. Levi asserts, in his affidavit, that Eli Baumwolspiner, Zaberman, and Levi signed an agreement to have the case heard by the Beis Din, after which the three-member panel of the Beis Din heard the parties’ arguments. While Levi contends that the Beis Din did not require Beth Jacob to pay any money to Baumwolspiner, and permitted the construction to continue, there are no documents submitted on this motion regarding the parties’ agreement to arbitrate, or the Beis Din’s determination. The Baumwolspiner’s maintain that they merely sought the Beis Din’s assistance in preventing further damage, but did not submit the issue of payment for the damages to the Beis Din for consideration.

The property owner’s insurance company, Tower Insurance, paid its insured for the damage and then sued the Bais Yaakov. The school argued that the court should “compel arbitration (in the Beis Din) on the ground that plaintiff’s subrogors are bound by their agreement to arbitrate, and Tower stands in their shoes.”

The insurance company argued that there was no agreement or contract binding the parties to adjudicate their claims before Bais Din.  The court agreed, noting that:

Beth Jacob has produced no written agreement to arbitrate, either from prior to the parties’ appearance at the Beis Din, or dating from that appearance. An agreement to arbitrate must be in writing in order to be enforced. CPLR 7501. Furthermore, that writing must make it clear what issues are to be arbitrated, and make the parties’ intention to arbitrate the dispute unequivocal.

The upshot is that parties who are in Bais Din should be certain that the agreement to arbitrate, as well as the scope of the arbitration, are well documented. To protect their authority, Batai Dinim should not proceed with a hearing unless and until all parties enter in such written agreements.

Dina D’Malchusa Legal Seminar on Oct. 17, 2010

I was forwarded the following e-mail:

Agudath Israel of America invites all men and women to an important Dina D’Malchusa Legal Seminar, geared towards business professional and owners, service providers, non-profit administrators and board members.

The seminar will be addressed by prominent attorneys, presenting material not discussed at the previous seminar. The event will take place on Sunday, October 17th from 9:00am – 1:00pm at Bnos Bais Yaakov in Far Rockaway. Breakfast will be served.

Three CLE/CPE Credits Available (provided by ACE Seminars).

Registration is $36 and reservations can be made by calling 212-797-9000 ext 335 or emailing: legalservices@agudathisrael.org.

Against a so-called “Orthodox Tea Party”

The political and ideological interests of Orthodox Jews often coincide with various conservative agendas.  I, for one, would love to receive school vouchers.  Kashrut, yeshiva tuition, home prices and rents in Jewish communities are expensive, so tea party style tax breaks would be particularly welcome by most people I know.  As I live in a community that absorbed Jewish refugees from the Middle East, and have family living in Israel, I have little patience or sympathy for international thugs or coy flotillas, although I realize that international policy is nuanced and that pragmatism often trumps principle.

But we are not ideological twins with any group within the conservative movement.  The Martin Grossman saga raised questions as to whether, behind the law-and-order rhetoric of many Orthodox Jews, Judaism really can support the death penalty.  It seems to me that a nation with a strong welfare system is probably more in tune with the community values of the Torah than the conservative notion of fend-for-yourself individualism.  The halachic marketplace may be capitalistic, but it is also highly regulated by laws relating to interest, competition, permissible profit margins, among many other laws.

This ideological disparity is one reason why we should be wary of aligning ourselves too closely with any conservative group, even if we do indeed support specific candidates or policies.  But beyond the mere ideological disparity, there’s a particular danger in aligning ourselves with a movement that may turn out to be a political dead end, especially if the alliance is premised on political expediency rather than a commitment to sharing core values.  If (and when) the movement loses momentum, our political activism may stall with it.  Worse, if (and when) the movement is discredited for lacking a coherent policy, for supporting candidates who are populist, but politically obtuse and/or narrow minded bigots, we risk becoming discredited ourselves.  Our own political voice will be lost when it counts.

Yesterday’s New York Times ran an article, Agendas of Paladino and Rabbi Meld which described Rabbi Yehuda Levin’s tea party enthusiasm and backing of Carl Paladino as the Republican candidate for governor:

The visit had strategic appeal for both sides: Mr. Paladino, an anti-abortion, anti-gay-marriage Roman Catholic businessman from Buffalo, hoped to find like-minded voters among the politically and socially conservative Orthodox Jews of Brooklyn. And Mr. Levin, who has long dreamed of creating “an Orthodox Tea Party,” as he put it, was eager to help, in part by lining up appearances for Mr. Paladino at synagogues and yeshivas.

I’m not really sure who Rabbi Levin is, but I hope he has less influence in the Jewish communities than he’s being given credit for.  He did more than just pick the wrong guy and the wrong movement to hook up with.  The Republic party, and likely tea party leaders as well, are trying to disown Paladino over anti-gay remarks prepared by Rabbi Levin.  Even if Rabbi Levin, as he says, “stands ready to defend the content” of the portions of the speech he drafted, this is not the kind of political involvement we need.

In fact, just the idea of an Orthodox Tea Party is preposterous, since there’s nothing Orthodox about the tea party’s platform (or lack thereof).  The tea party may be influencing national politics right now, but it can’t last in its current form, based more on whipped up, often disingenuous, outrage than on real policy.  And when there is a backlash, the interests of Jewish communities don’t have to be there to go down with it.

Interfering with business relationships

Rabbi Max Sutton’s recent column in Community discusses the halachot of interfering with another person’s contract or business relationship.  Rabbi Sutton uses hypotheticals to highlight the following questions:

  1. May one negotiate with a licensor for exclusive rights to a license currently held by a competitor?
  2. May a salesman who leaves an employer for a competitor lure company accounts to his new employer?  If he may, may he redirect unfulfilled orders from his old employer to his new employer?
  3. May an employee quit his job and open a business in direct competition with his previous employer?

The basic rule is that one may not induce a breach of contract, but one may compete for the same contract at the end of the contract term or when the contract has been fully performed.  The full article can be read here.

Rabbi Sutton applies the above rule to employment relationships in current business settings, but does not draw a distinction in this regard between contract employees and at-will employees.  An at-will relationship, which is more common, allows either party to terminate the employment relationship for any reason without liability.  It seems to me that making an offer to a competitor’s at-will employee is not the same as inducing a breach of an agreement, since the employer specifically assumed that risk when agreeing to the at-will employment or by not offering a contract for a specific term.

Saying that the competitor is inducing a breach of the agreement would imply that an at-will employment is something other than at-will, i.e., that terminating the employment is a breach of an agreement.  However, the understanding between employer and employee is that neither party is required to continue the relationship.  I would argue that just as it is not a breach of the agreement for the employee to look for another job, it is not an inducement to breach for a competitor to make an offer to the employee.

Civilization and culture in the age of Yaval, Yuval and Tuval Cain

Rabbi Daniel Yolkut of Cong. Poale Zedeck in Pittsburgh, PA, related a very interesting insight during his Shabbat morning derasha this past week.

Cain’s descendant, Lemech, had three sons — Yaval, Yuval and Tuval Cain — who together appear to have developed the building blocks of civilization.  Yaval was the first to systematically domesticate animals.  Yuval was the first to create musical instruments.  Tuval Cain was the first to create tools from metals.  It was thus Cain’s descendants who first discovered the skills necessary for people to join together into permanent societies with tools, culture and a steady supply of food.

It is interesting to note that many of the names of Cain’s descendants were either identical or similar to the names of Shet’s descendants.  Each line had men named Hanoch and Lemech.  Cain’s line had Metushael while Shet’s had Metushelah.  However, Shet’s line had no one with names similar to Yaval, Yuval and Tuval Cain.  While Shet had several righteous descendants, the Torah does not relate that any one among Shet’s descendants had the impact on the formation of civilization like Yaval, Yuval and Tuval Cain.

Rabbi Yolkut suggested that perhaps the drive to advance culture and civilization was a result of Cain’s murder of Hevel.  In an attempt to either address or move beyond the guilt, Cain’s descendants turned to the development of culture.  Put in these terms, the earliest examples of art and culture were produced by the burdens of guilt and anxiety, and the need to address the darker side of human actions and motivations.  Indeed, while the names Yaval, Yuval and Tuval have no equivalent among Shet’s descendents, they are all similar to Hevel’s name.